Investments: Treasuries to Gold
In a notable shift in global financial markets, gold has overtaken U.S. Treasuries as the second largest asset held in central banks’ foreign currency reserves, only trailing the U.S. dollar. This shift comes after the price of gold has soared over the past year, and reflects a growing desire among central banks to diversify their reserve holdings amidst a turbulent geopolitical backdrop, rising fiscal deficits, and concerns about the purchasing power of fiat currencies (government-issued currency not backed by a physical commodity). Unlike Treasuries, gold carries no credit risk, serves as a hedge against inflation, and cannot be frozen or sanctioned in an increasingly digital economy, making it an attractive store of value in a shifting global economic landscape. Looking ahead, this development does not signal the end of dollar dominance, but rather suggests a gradual rebalancing of the global financial system. Rising fiscal deficits across developed economies have raised concerns around future debt issuance and inflation. As a result, central banks are diversifying into safer, real assets in preparation for a world with less fiscal certainty. For investors, this trend reinforces the importance of diversification across asset classes and economies, as the forces shaping the balance sheet of governments will influence currencies, interest rates, and returns over the long-term.
Planning: Trump Accounts
Trump Accounts have recently emerged as a savings candidate for children, subject to go live July 4, 2026. Under the current framework, children born between January 1, 2025 and December 31, 2028 will be eligible to open an account and receive a one-time $1,000 federal stipend. Parents, extended family, friends, and even businesses or charities can contribute to the account, subject to an annual contribution cap of $5,000 per child. Contributions must be invested in a low-cost index fund that tracks a market benchmark like the S&P 500, with earnings growing tax deferred. No withdrawals are allowed before the child turns 18, after which the account converts into a traditional IRA in the child’s name. The goal behind these accounts is to start children on a long-term investment path, where time and compounding can play a meaningful role in building future financial security for the child and their family.
